Official Summary Text
HB2398 - 572R - Senate Fact Sheet
Assigned to
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PASSED BY COMMITTEE
ARIZONA STATE SENATE
Fifty-Seventh
Legislature, Second Regular Session
AMENDED
FACT SHEET FOR
H.B. 2398
watercraft;
insurance requirements; penalties
Purpose
Requires a
watercraft owner who provides a watercraft for rent or charter in Arizona, a
boat livery owner who provides a watercraft for hire on a waterway in Arizona and
a peer-to-peer watercraft sharing program (sharing program) to maintain a
liability insurance policy and prescribes coverage requirements for the policy.
Classifies a watercraft owner's or boat livery owner's failure to adhere to the
insurance requirements as a class 3 misdemeanor or a class 1 misdemeanor, if
the watercraft is involved in an accident in Arizona.
Background
Statute
regulates the operation of watercraft on all waterways in Arizona, excluding
vessels owned by federal government agencies in performance of their official
duties (
A.R.S. Title 5,
Chapter 3
).
A
watercraft
is any boat designed to be propelled by machinery, oars, paddles or wind action
on a sail for navigation on the water, or as may be defined by rule of the
Arizona Game and Fish Commission (Commission). A
waterway
is any body of
water, public or private, on which a watercraft can be navigated. A
livery
is
a business authorized to rent or lease watercraft with or without an operator
for recreational, non-commercial use as prescribed by law (
A.A.C.
R12-4-501
;
A.R.S.
� 5-301
).
Statute requires
a boat livery owner to keep a record of the name and address of the person or
persons hiring any watercraft, the person's identification number, the
departure date and time and the expected and actual time of return and to
preserve the record for at least three months (
A.R.S.
� 5-371
).
There is no anticipated fiscal impact to the state General Fund associated
with this legislation.
Provisions
Boat Liability
Insurance Minimum Coverage
1.
Requires a watercraft owner who provides a watercraft for rent or
charter in Arizona to maintain a commercial boat liability policy or a personal
lines boat policy with a specified commercial or charter boat liability
coverage endorsement.
2.
Requires a boat livery owner to maintain a commercial boat liability
policy for persons who hire a watercraft for use on a waterway in Arizona and
requires the liability coverage to be in effect at any time the watercraft is
operated on a waterway in Arizona.
3.
Requires a sharing program to maintain a primary commercial boat
liability insurance policy that provides coverage for bodily injury or property
damage that occurs during the watercraft transaction.
4.
Requires
a watercraft owner's, boat livery owner's and sharing program's boat liability
policy to provide primary boat liability insurance coverage as follows:
a)
$25,000 because of bodily injury to or death of one person in any one
accident;
b)
subject to the limit for one person, $50,000 because of bodily injury to
or death of two or more persons in any one person in any one accident; and
c)
$20,000
because of injury to or destruction of property of others in any one accident.
5.
Requires a watercraft owner who provides a watercraft for rent or
charter in Arizona to maintain, at all times, the specified coverage for
injuries to persons and for loss or damage to property by reason of the rental
or operation of the watercraft provided by the owner for rent or charter.
6.
Requires the owner of a boat livery to maintain, at all times, the
specified coverage amounts.
7.
Classifies a watercraft owner's or boat livery owner's failure to adhere
to the outlined insurance coverage requirements as a class 3 misdemeanor or
class 1 misdemeanor, if the watercraft is involved in an accident in Arizona.
Sharing Program
Insurance Requirements
8.
Defines
sharing program
as a business that connects watercraft
owners with watercraft operators to enable the sharing of watercraft for
financial consideration and does not include a boat livery or commercial
motorized watercraft.
9.
Requires a sharing program to ensure that the commercial liability
insurance policy recognizes that the watercraft insured under the policy is
made available and used through the sharing program and does not exclude the
use of a shared watercraft by a shared watercraft operator.
10.
Requires
a sharing program to provide proof of insurance to the shared watercraft
operator before the watercraft sharing start time.
11.
Requires,
if an accident occurs during the watercraft sharing period, the shared
watercraft operator and the sharing program to provide proof of insurance at
the time of the accident to the parties involved in the accident.
12.
Requires
a sharing program to collect, verify, and retain for six years after the
termination of a shared watercraft transaction, records relating to the use of
a shared watercraft, including times used, fees paid by the shared watercraft
operator and monies received by the shared watercraft owner.
13.
Requires,
in an insurance claim investigation, the sharing program and any insurer that
provides the required insurance coverage to cooperate with all other parties involved
in the claim.
14.
Specifies that in an
insurance claim investigation:
a)
the sharing program must provide to any interested party the required records;
and
b)
the
insurer that provides the required insurance coverage must provide a clear
description of the coverage afforded and any coverage limitations and exclusions.
15.
Specifies
that the sharing program insurance requirements do not prohibit a sharing
program from recovering insurance costs from a shared watercraft owner or
shared watercraft operator.
16.
Specifies that the sharing
program insurance requirements do not limit:
a)
the liability of a sharing program for any act or omission that results
in injury to any person as a result of the use of a shared watercraft through a
shared watercraft transaction; or
b)
the
ability of the sharing program, by contract, to seek indemnification from the
shared watercraft owner or the watercraft operator for economic loss that is
sustained by the sharing program and that results from a breach of the terms
and conditions of the shared watercraft transaction.
17.
Allows
required sharing program insurance policies to be obtained from an insurer authorized
to transact insurance in Arizona or a surplus lines insurer or domestic surplus
lines insurer authorized to issue insurance coverage in Arizona.
Commission
Watercraft Administration
18.
Allows
the Commission to require a watercraft or boat livery owner who is subject to
the outlined insurance coverage requirements to certify the existence of
insurance in the form and at the time the Commission deems necessary.
19.
Allows
the Commission to forward the watercraft owner's or boat livery owner's
certification of insurance to the named insurer to determine if the
certification is correct.
20.
Specifies
that civil liability does not accrue to the insurer or any of its employees for
reports made to the Commission if the reports are made in good faith based on
the most recent information available to the insurer.
Miscellaneous
21.
Specifies that an insurer
authorized to transact insurance in Arizona:
a)
is not required to offer, issue, renew or provide a commercial boat
liability policy; and
b)
is
not prohibited from voluntarily offering or providing a commercial boat
liability policy pursuant to the insurer's underwriting standards and risk
selection.
22.
Defines
boat livery
as a business that rents, leases or charters a motorized
watercraft, a personal watercraft or any other watercraft to the general public
for noncommercial, recreational use.
23.
Defines
terms.
24.
Makes
technical and conforming changes.
25.
Becomes
effective on the general effective date.
Amendments Adopted by Committee
1.
Allows a watercraft owner to maintain a personal line boat policy with
specified commercial or charter boat liability coverage in place of commercial
boat liability insurance.
2.
Establishes requirements for sharing programs and requires a sharing
program to obtain and maintain a primary commercial boat liability insurance
policy.
3.
Prescribes minimum coverage requirements for a sharing program's
required insurance policy and requires that a sharing program's policy does not
exclude the use of a shared watercraft by a shared watercraft operator.
4.
Requires a sharing program to collect, verify, and retain for six years
after the termination of a shared watercraft transaction, records relating to
the use of a shared watercraft.
5.
Outlines requirements for a sharing program during a watercraft sharing
period and during an insurance claim investigation.
6.
Specifies that the sharing program insurance requirements do not
prohibit a sharing program from recovering insurance costs from a shared
watercraft owner or shared watercraft operator.
7.
Specifies
that the sharing program insurance requirements do not limit any of the
following:
a)
the liability of a sharing program for any act or omission that results
in injury to any person as a result of the use of a shared watercraft through a
shared watercraft transaction; or
b)
the
ability of the sharing program, by contract, to seek indemnification from the
shared watercraft owner or the watercraft operator for economic loss that is
sustained by the sharing program and that results from a breach of the terms
and conditions of the shared watercraft transaction.
8.
Specifies that an insurer authorized to transact insurance in Arizona is
not required to offer, issue, renew or provide a commercial boat liability
policy.
9.
Defines terms.
10.
Makes
technical and conforming changes.
House Action
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Senate
Action
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Prepared by
Senate Research
March 25, 2026
MG/SJ/hk
Current Bill Text
Read the full stored bill text
HB2398 - 572R - H Ver
House Engrossed
watercraft; insurance
requirements; penalties
State of Arizona
House of Representatives
Fifty-seventh Legislature
Second Regular Session
2026
HOUSE BILL 2398
AN
ACT
amending title 5, chapter 3, article 5,
Arizona Revised Statutes, by adding section 5-342; amending section 5-371,
arizona revised statutes; relating to operation of watercraft.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it
enacted by the Legislature of the State of Arizona:
Section 1. Title 5, chapter 3, article 5,
Arizona Revised Statutes, is amended by adding section 5-342, to read:
START_STATUTE
5-342.
Watercraft; insurance responsibility requirements; required
limits; violation; classification
A. Notwithstanding any other law, an
owner of a watercraft who provides a watercraft for rent in this state shall
maintain a commercial boat liability policy.�
B. An owner's commercial boat
liability policy shall provide primary boat liability insurance coverage as
follows:
1. $25,000 because of bodily injury
to or death of one person in any one accident.
2. Subject to the limit for one
person, $50,oo0 because of bodily injury to or death of two or more persons in
any one accident.
3. $20,000 because of injury to or
destruction of property of others in any one accident.
C. The owner of a watercraft who
provides a watercraft for rent in this state shall maintain at all times the
amounts prescribed in subsection B of this section for injuries to persons and
for loss or damage to property by reason of the rental or operation of the
watercraft that is provided by the owner of the watercraft for rent.
D. The commission may require an
owner of a watercraft who is subject to the insurance responsibility
requirements of this section to certify the existence of insurance
responsibility in the form and at the time the commission deems necessary.� The
commission may forward the certification to the named insurer to determine if
the certification is correct.� Civil liability does not accrue to the insurer
or any of its employees for reports made to the commission if the reports are
made in good faith based on the most recent INFORMATION available to the
insurer.
E. An owner of a watercraft who rents
a watercraft in this state without meeting the insurance responsibility
requirements of this section is guilty of:
1. A class 3 misdemeanor.
2. A class 1 misdemeanor if the
watercraft is involved in an accident in this state.
END_STATUTE
Sec. 2. Section 5-371, Arizona Revised
Statutes, is amended to read:
START_STATUTE
5-371.
Boat liveries; requirements; insurance requirements; required
limits; violation; classification
A. The owner of a boat livery shall keep or cause to
be kept a record of the name and address of the person or persons hiring any
watercraft
which
that
is designed or
permitted
allowed
by
him
the owner
to be operated as a watercraft, the identification
number
thereof
of the watercraft
,
the departure date and time and the expected and actual time of
return. Such record shall be preserved for at least three months.
B. Neither the owner of a boat livery nor
his
the owner's
agent or employee shall
permit
allow
any watercraft to be operated
from
his
the owner's
premises unless
it shall have been provided, either by the owner or renter, with the equipment
required by this chapter.
C. The certificate of number for a watercraft less
than twenty-six feet in length that is leased or rented to a person for
noncommercial use of less than twenty-four hours may be retained on shore
by the owner or
his
the owner's
representative at the place from which the watercraft departs or returns to the
possession of the owner or
his
the owner's
representative. A watercraft
which
that
does not have the certificate of number on board shall be
identified while in use as may be prescribed by the regulations of the
commission.
d. the owner of a boat livery shall
maintain a commercial boat liability policy for persons who hire a watercraft
for use on a waterway in this state.� this liability coverage shall be in
effect at any time that the watercraft is operated on a waterway in this state.
E. A Boat Livery owner's commercial
boat liability policy shall provide primary boat liability insurance coverage
as follows:
1. $25,000 because of bodily injury
to or the death of one person in any one accident.
2. Subject to the limit for one
person, $50,000 because of bodily injury to or the death of two or more persons
in any one accident.
3. $20,000 because of injury to or
destruction of property of others in any one accident.
F. The owner of a boat Livery shall
maintain at all times the amounts prescribed in subsection E of this section.
G. The commission may require the
owner of a boat livery that is subject to the insurance responsibility
requirements of this section to certify the existence of insurance
responsibility in the form and at the time the commission deems necessary. The
commission may forward the certification to the named insurer to determine
whether the certification is correct. Civil liability does not
accrue to the insurer or any of its employees for reports made to the
commission if the reports are made in good faith and are based on the most
recent information available to the insurer.
H. The owner of a boat livery that
causes a watercraft to be operated on a waterway in this state without meeting
the insurance responsibility requirements of this section is guilty of:
1. A class 3 misdemeanor.
2. A class 1 misdemeanor if the
watercraft is involved in an accident in this state.
END_STATUTE